All Forum Posts by: John Mangiameli

@Tyler Gibson - NOI is not what I'm asking about.

In example above loan is 1.5mm at 3.5% and NOI is $140,000.

Interests on loan is $52,500

NOI not eaten up by that interests is $87,500.

Start paying principal payments out of the $87,500 and the COC is not always that great. Certainly never as great as they make it out to be.

So my question: Why would nearly everyone on YouTube say this deal cash flows $87,500?

Perhaps they count the principle payments as profit because they’re gaining equity?

Hey Cats,

New to MF, not new to RE. Still seems like I’m missing something about how the big(er) boys play this game. 

You know the usual suspects for RE content on YouTube. Why is it when they break down their financing numbers on a big’ol TV or blown-out whiteboard (fix your exposure, man) they never seem to account for paying any principal?

Example:

Price: $2,000,000

Down: $500,000

Loan $1,500,000 @ 3.5%

NOI: $140,000

WOW LOOK YOU MAKE OVER $85K - 17% COC HOW CAN YOU NOT BUY MY COURSE?!

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What am I missing?